A Connecticut attorney waived his right to indictment and pleaded guilty to one count of conspiracy to commit mail, wire and bank fraud related to a multimillion dollar mortgage fraud scheme in New Haven.
According to court documents, Bradford Rieger was part of a conspiracy with Ronald Hutchison and Menachem Levitin that took place between 2006 and 2008 to defraud mortgage lenders and financial institutions. The conspirators devised a scheme to obtain millions of dollars in fraudulent mortgages to purchase dozens of multi-family properties.
As part of the scheme, sellers of the properties agreed to accept sale prices that were significantly lower than the contract prices. Lenders were not made aware of the lower prices from which the buyers obtained financing to purchase the homes because the conspirators sent them false HUD-1 forms.
Because of the submission of the inaccurate HUD-1 forms and other false documentation, including falsified monthly rental income and fictitious leases, the mortgage lenders issued mortgages based on the inflated sales price.
In most of the fraudulent transactions, the buyers did not make any deposits or downpayments for the properties they purchased. Rather, the conspirators used some of the fraudulently obtained mortgage proceeds to cover the downpayments and deposits.
Also, at or shortly after a closing, a borrower would often receive several thousand dollars, although this payment was not disclosed to the lender either.
Rieger acted as the closing attorney in approximately 19 fraudulent transactions. In connection with many of these closings, Rieger prepared the fraudulent HUD-1 forms that were submitted to lenders.
In total, more than $10 million in fraudulent mortgages on more than 40 properties were obtained during the conspiracy. Many of the homes purchased during the scheme went into default and have been foreclosed upon, causing losses of more than $7 million to lenders.
When he is sentenced in October, Rieger faces a 30-year prison term and a maximum fine of nearly $20 million. As part of his plea agreement, Rieger has committed to pay at least $2.2 million in restitution.
